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THE HORNBACH-BAUMARKT SHAREMixed picture on stock markets in 2014
Inebriated by exceptional vintages in 2012 and 2013, inves-tors on global stock markets had to be satisfied with a signif-icantly more modest performance in the 2014 calendar year.
Above all, it was the geopolitical hotspots that led global stock indices to post a poorer performance than in previous years. The Russian-Ukrainian conflict and resultant spiral in sanctions were a regular source of insecurity on the stock markets, as was the conflict in the Middle East due to the Islamic State terror organization. Not only that, crisis-hit EU member states also recovered more slowly than expected.
Global comparison shows that the German stock market
"only" reached the middle of the league table in the 2014 calendar year, with better performances reported in particular by the Asian and US stock markets. The DAX, Germany's lead index, nevertheless finished 2014 up 4.31 % at around 9,800 points. As the year progressed, it acquired five-digit status for
the first time, benefiting above all from the ECB's ultra-loose monetary policy. Torn hither and thither between disappoint-ing developments in the domestic economy and numerous cases of company earnings being held back by geopolitical crises, the DAX witnessed great volatility and initially called off any further excursions above the 10,000 point mark. The DAX reached its lowest balance in the 2014 calendar year at 8,355 points on October 10.
Chasing new records in 2015
It was an entirely different picture in spring 2015. From the beginning of the year, the DAX clearly crossed the 10,000 line for the first time, posting fulminant growth to a record high of 11,401 points (February 27, 2015). This development was increasingly driven by the expectation of large-scale security purchases by the European Central Bank (ECB). At its Govern-ing Council meetGovern-ing on January 22, 2015, the ECB announced
THE HORNBACH-BAUMARKT SHARE
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THE HORNBACH-BAUMARKT SHARE
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that it would be acquiring government bonds worth
€ 60 billion on a monthly basis through to at least September 2016. Even the results of the parliamentary elections in Greece on January 25, 2015 and resultant intensification in the discussions surrounding a potential exit from the euro area ("Grexit") only triggered a moderate, short-lived correc-tion in the new heights scaled by the DAX.
While company earnings were most recently still dominated by downward corrections, the combination of a substantially lower oil price and a lower external value of the euro already created an opposing upbeat reaction in terms of economic expectations. The DAX closed at 11,401 points at the end of our 2014/2015 financial year. With a performance of 21.8%
during our reporting period, Germany's lead index thus stepped up yet another gear compared with the 2014 calendar year. The share of HORNBACH-Baumarkt-AG (ISIN DE0006084403) was unfortunately unable to keep up with this performance. It nevertheless moved in the same direction as the German stock market for most of our 2014/2015 finan-cial year, albeit at lower performance levels than the DAX, MDAX, and SDAX select indices.
Volatile developments bring new all-time high
On March 1, 2014, the share was listed at a Xetra closing price of € 30.30. Shortly after this, it began to gain great momentum.
This was due to the very positive results published for the first quarter of 2014/2015 (March 1 to May 31, 2014) as a result of extremely mild weather in spring 2014 compared with the previous year. In March 2014 in particular, customer demand for construction, renovation, and garden products and services virtually exploded across our group-wide network. Against this backdrop, the share reached its new all-time high at € 34.98 on July 15, 2014. In line with the motto "all good things come to an end", this was followed by a sharp correction based on the figures for the second quarter which, as expected, were more defensive. Following publication of our half-year finan-cial report, including our sales and earnings figures for the second quarter of 2014/2015 on September 25, 2014, the share ultimately reached its annual low at € 26.56 on Octo-ber 10, 2014. Despite strong base effects due to extremely
favorable weather conditions and consolidation effects result-ing from the insolvency of the Praktiker/Max Bahr Group in the third and fourth quarters of the previous 2013/2014 financial year, our share nevertheless gradually recovered from its annual low. The nine-month and third-quarter figures published on December 22, 2014 were thus granted a consistently positive reception both in the run-up to and after publication. Just a short time later, the Baumarkt share ended the 2014 calendar year at a price of € 30.22. Thanks not least to the positive overall performance of the stock markets at the beginning of the year, our share finished the trading year as of the balance sheet date on February 28, 2015 at a Xetra price of € 32.60.
Over the twelve-month period, the stock thus increased its value by 7.6% (2013/2014 financial year: plus 16.7%). It is also pleasing to note that, for the first time in its history, HORNBACH-Baumarkt-AG ended the financial year with a stock market value (market capitalization) of more than € 1 billion.
Significant increase in stock market liquidity
Trading volumes with the HORNBACH-Baumarkt share in the 2014/2015 financial year rose sharply compared with the reporting period one year earlier. One key reason for this was the exit by the British retail group Kingfisher plc from all its financial investments in the HORNBACH Group, a step an-nounced on March 25, 2014. This also involved the 5.2%
stake held in ordinary shares at HORNBACH-Baumarkt-AG.
The sale of this package to numerous new shareholders on the capital market has broadened our investor base. From now on, this in turn will make it easier for retail and institutional investors to purchase and sell shares in the company. Not only that, our ongoing financial communications within our inves-tor relations activities also played a key role in improving the share's liquidity. Put in figures, it looks like this: In the period from March 1, 2013 to February 28, 2014, trading volumes still amounted to 741,907 shares in total. Given 250 trading days, that is equivalent to average daily trading volumes of around 2,968 shares. Expressed in euros, trading volumes for this period totaled € 20,042,371, or an average of € 80,169 per day. It was an entirely different picture in the financial year under report. Trading volumes expressed in numbers of shares totaled 2,619,027. Based here too on 250 trading
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THE HORNBACH-BAUMARKT SHAREKey data about the HORNBACH-Baumarkt-AG share (IFRS) 2014/2015 2013/2014
Nominal value of the share € 3.00 3.00
Dividend1) € 0.60 0.60
Basic earnings per share € 2.19 1.77
Total dividend payment € 000s 19,084 19,084
Shareholders' equity per share2) € 29.02 27.10
Market capitalization2) € 000s 1,036,908 970,114
Share price (Xetra)2) € 32.60 30.50
12-month high € 34.98 31.10
12-month low € 26.56 24.00
Shares issued Number 31,807,000 31,807,000
Price / earnings ratio2) 14.9 17.2
1)2014/2015: subject to resolution by the Annual General Meeting
2)At the end of the financial year (the last day in February)
days, this corresponds to an average daily trading volume of 10,476 shares, more than three times the previous year's figure. In euros, trading volumes increased to € 81,942,933, or an average of € 327,772 per day. Thanks also to the posi-tive share price performance, this figure more than quadru-pled compared with the previous year.
Transparent financial communications
Our investor relations activities provided shareholders, ana-lysts, the financial media and the general public with prompt information on the business performance of the HORNBACH-Baumarkt-AG Group in the past financial year. All quarterly reports, annual reports, press releases and additional finan-cial information were published on the internet communica-tions platform of the HORNBACH Group (www.hornbach-group.com), where we pool all information and services, especially for shareholders and press representatives. This separate corporate communications site complements the product-related and marketing content available at HORN-BACH’s website at www.hornbach.com.
The Annual General Meeting, annual results press conference, analysts’ conferences and meetings with investors in Germa-ny and abroad give us opportunity to maintain our dialog with the capital markets. Moreover, we draw on personal contacts with investors and the media to present our company’s objec-tives and strategy. Alongside our current performance figures, we also outline the special features of our concept, our market position, particularly with regard to the HORNBACH Group’s future growth prospects, as well as the macroeconomic and sector framework.
Dividend at previous year's level
The Board of Management and Supervisory Board of HORN-BACH-Baumarkt-AG are proposing a dividend at the previous year's level for approval by the Annual General Meeting on July 8, 2015. This corresponds to a dividend of € 0.60 per no-par share with dividend entitlement. The company thus aims to achieve a fair balance between shareholders' interests on the one hand and its growth financing on the other.